Analysts at Commerzbank explained that USD/CNY spiked to the weakest level since January 2017, reflecting the bearishness towards the economic and currency outlook.
Key Quotes:
“As such, there is increasing speculation that the PBoC will not be able to defend the 7 hurdle in USD-CNY in the coming months. “
“We do see rising risks that CNY could depreciate further from current levels.”
” However, Chinese authorities should think twice before giving up the critical threshold for USD-CNY at 7 too lightly as this could unleash forces that are even more difficult to control. “
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